Posted on Apr 21, 2017
by Jennifer Bragar
In March 2017, Tillamook County issued its new housing needs analysis, “Creating a Healthy Housing Market for Tillamook County.” The County recognized the necessity to take a new approach to the analysis of housing in light of its changed economy. The study utilizes graphic representations and analysis of the coastal and interior markets to focus on the need for regional solutions. Coastal markets such as Manzanita, Oceanside, and Pacific City fuel high home prices, while interior cities such as Wheeler, Tillamook, and Cloverdale provide more affordable options.
The study described current conditions as a coastal market where higher-end seasonal homes help drive tourism and service-based economies that rely on low-wage workers. To find local housing, those workers look to the interior market, but compete with others employed in the historically low-wage agricultural economy, and middle-wage workers like teachers and nurses for a small supply of housing. This competition is further heightened by the expansion of Airbnb-type services geared to the tourist market, as well as loss of supply by purchase for second-homes for Portland-area city dwellers.
For example, the study finds there are 2,266 workers in retail and food services in Tillamook County earning an average wage of approximately $20,000 per year. But, the number of rental units that can be reasonably afforded by a worker at that wage level is nearly ten times smaller than the number of workers – with only 239 such units available in 2014. The study concludes there is a gap of 437 affordable units for low-wage households.
The inability to house the county’s service workforce means that many workers live outside the county, contributing to adverse impacts to the environment and compromising quality of life due to increased commute times. But, building more housing within Tillamook County is constrained by land supply. Like many places in Oregon, the county will have to consider increased density to address the needs of its working class.
The study identifies a number of strategies to try to fill the funding and supply gap:
1. Create and fund a countywide Housing Coordinator Position;
2. Adoption of this Housing Plan by the county and incorporated cities;
3. Revisions to zoning districts in the county and incorporated cities and implementation of revitalization strategies;
4. Employer assisted housing;
5. Public/Private Partnership;
6. Defer System Development Charges for up to five years (post-production) for low to moderate income households;
7. Restructure the Transient Lodge Tax to allow funds to go towards workforce housing development;
8. Create and fund a countywide Community Land Trust;
9. Increase investment in infrastructure development within the urban growth boundary; and
10. Transfer of development rights.
Kudos to the county for engaging a consultant team that included a structure to accomplish these goals, metrics and implementation schedules, and examples of best practices from cities, counties, and housing authorities across the nation.
Tillamook has already started efforts on one element of the plan. The restructuring of the transient lodge tax (TOT) is given a three year timeframe in the study. House Bill 3260 was initiated this session to allow coastal counties to adopt a local TOT of up to 5% on residential short-term vacation rental property with the revenues used to fund affordable housing in coastal communities within the county. Other coastal cities have seen success in adopting TOTs for affordable housing. For example, in 2000, the City of Santa Cruz, California adopted Measure U – a 2% TOT on hotel and motel guests to fund non-profit homeless service providers, including the establishment of year-round shelters for homeless families and children. Tillamook County’s Housing Plan makes a compelling argument for making the tourists pay for their impact on increased housing costs for low income folks across the region.
House Bill 3260, in its current form, will not meet the deadlines for passage out of committee this session, but it did receive a courtesy hearing, prepping legislators for consideration in future sessions. Though unlikely in this instance, the legislature has been known to stuff bills as the session progresses and I will be keeping watch for such activity related to this effort.
Tillamook County is also planning for August 2017 adoption of both commercial and residential Construction Excise Taxes in the amount of 1% of the value of improvements, as authorized by the 2016 passage of Senate Bill 1533. As currently drafted, the tax imposed on residential improvements will be distributed as follows:
• 15% of net revenue will be remitted to the Oregon Department of Housing and Community Services to fund home ownership programs;
• 50% of net revenue will be transferred to the Community Development Workforce Housing Fund to fund finance-based incentives for programs that require affordable housing; and
• 35% of net revenue will be transferred to the Community Development Workforce Housing Fund to support the production and preservation of affordable housing units at, and below, 80% median family income.
Further, the current draft calls for 100% of net revenues received from the tax imposed on commercial improvements to be distributed to the Community Development Workforce Housing Fund to support the production and preservation of workforce housing units at or below 200% median family income.
Tillamook County will be a rural area to watch as it is one of the first such areas in Oregon to adopt a meaningful and modern housing plan. The goals may be realized, as Tillamook is already showing its commitment to find funding to implement the plan.